Bullish view on prospects of music labels from one of the big investors… Detailed article linked below.
Disc: invested in both Saregama and Tips
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Are these comparisons of western pop music to Indian film music comparable? I mean their music is an industry, it is structured. MJ bought Beatle’s music. When a popular musician passes away, the sales of their work increases. Cover versions are made, there are tribute acts, impersonators, the range is wide and far reaching and its effect is long lasting. Then there is certification for sales. So by all means, western music is structured and it is an industry, so a business.
Has Indian music industry begun its structural journey or this music part was always structured and it is becoming increasingly structured with the advent of apps?
The bear case here is that content distributors would consolidate and start making their own original content and/or go direct to artists. Spotify has already started doing this, just like Netflix for video.
The other issue is that market seems to be valuing these businesses on EV/EBITDA. However they need constant re-investment to keep their catalog fresh. People listen to newer content much more than older content.
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Spotify is only one form of distribution i.e. online audio streaming or DSPs(Digital Service Providers). Artists are better off by tieing up with music labels as they distribute the content across platforms i.e. all kind of audio streaming platforms(Spotify, Gaana, Apple music, Google music), vedio streaming platforms (YouTube and FB), short vedio apps, publishing with TV channels and Live events etc. Artists looks for maximum reach of his content which in turn increase his fame and generete him maximum revenue which is only possible with music labels.
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This is the entire presentation and Q&A by Bill Ackman on his investment in Universal Music Group. Some of the doubts raised above are well answered.
Happy Listening
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Spotify has already started signing up content creators for producing original content, just like Netflix.
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Slowdown looming ahead ?
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Its funny and strange that people just read the headline and post queries here, no research, no insights shared. I am not sure if you attended google’s concall yesterday, it was great.
Youtube is the biggest source of prime time TV viewership now in US and they are starting monetization of youtube shorts as well. Until now, shorts were giving no revenue to music labels, so think of revenue addition starting next year. How is that a bad news for music labels?
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